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HomeMy WebLinkAbout2010-126 - Sale and Delivery of Certificate of ParticipationRESOLUTION NO. 2010-126 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH AUTHORIZING THE PREPARATION, SALE AND DELIVERY OF NOT TO EXCEED $128 MILLION PRINCIPAL AMOUNT OF CERTIFICATES OF PARTICIPATION, SERIES 2010 (CIVIC CENTER PROJECT /CENTRAL LIBRARY REFUNDING) AND APPROVING CERTAIN DOCUMENTS AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of Newport Beach (the "City: ") and the Newport Beach Public Facilities Corporation (the "Corporation ") have previously entered into a Project Lease dated as of July 1, 1998 (the "1998 Lease ") relating to $7,330,000 City of Newport Beach Refunding Certificates of Participation, Series 1998 (Central Library Building Project) (the "1998 Certificates "), the proceeds of which refunded certain certificates of participation, the proceeds of which financed the acquisition and construction of the City's Central Library (the "Central Library Project "); and WHEREAS, the City and the Corporation desire to enter into a Site Lease dated as of November 1, 2010 (the "Site Lease ") and a Lease /Purchase Agreement, dated as of November 1, 2010 (the "Lease "), whereby the City, as agent of the Corporation, shall cause the acquisition, improvement and equipping of a new Civic Center, as described therein (collectively, the "Civic Center Project" and together with the Central Library Project, the "Project ") and whereby the City shall refinance the Central Library Project, and the City has agreed to lease the Leased Premises (defined below) from the Corporation, the forms of which have been presented to this City Council at the meeting of which the Resolution has been adopted; and WHEREAS, in order to finance the Project, the City and the Corporation desire to authorize the sale of the City of Newport Beach Certificates of Participation 2010A (Tax Exempt) (Civic Center Project/Central Library Refunding) (the "2010A Certificates ") evidencing fractional interests in the 2010A Lease Payments made by the City under the Lease, and the City of Newport Beach Certificates of Participation 2010B (Federally Taxable Direct Pay Build America Bonds) (Civic Center Project) (the "2010B Certificates" and together with the Series 2010A Certificates, the "Certificates ") each evidencing fractional interests in the 2010B Lease Payments made by the City under the Lease; and WHEREAS, Section 5450 et seq. of the California Government Code (the "Government Code ") provides statutory authority for pledging collateral for the payment of principal or prepayment price of, and interest on, any agreement, including certificates of participation, and the Government Code creates a continuing perfected security interest which shall attach immediately to such collateral irrespective of whether the parties to the pledge document have notice of the pledge and without the need for any physical delivery, recordation, filing or further act, and, therefore, the City and the Corporation hereby warrant and represent that pursuant to the Lease, the Trust Agreement, to be dated as of November 1, 2010, by and among The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee "), the City and the Corporation (the "Trust Agreement"), -1- DOCS OC/1110296v4/022459 -0014 and the Government Code, the Trustee will have a first priority perfected security interest in the Lease Payments described in the Lease represented by the Certificates pursuant to the Government Code. WHEREAS, the City Council desires to consent to the assignment of certain of the Corporation's rights, title and interest in and to the Site Lease and the Lease Agreement, including the right to receive such lease payments from the City, to the Trustee pursuant to an Assignment Agreement, between the Corporation and the Trustee, to be dated as of November 1, 2010 (the "Assignment Agreement "), the form of which together with the form of the Trust Agreement have been presented to this City Council at the meeting at which this Resolution has been adopted; and WHEREAS, the City Council desires to approve the form of a Purchase Agreement (the "Purchase Agreement "), by and between the City and Stone & Youngberg LLC as representative of itself and E.J. Del Rosa & Co., Inc., Merrill Lynch, Pierce Fenner & Smith Incorporated and Raymond James (collectively, the "Purchaser "), pursuant to which the Purchaser will agree to buy the Certificates on the terms and conditions set forth therein, the form of which has been presented to this City Council at the meeting at which this Resolution has been adopted; WHEREAS, the City Council desires to approve the form of a Preliminary Official Statement relating to the Certificates (the "Preliminary Official Statement ") to be distributed to potential investors, for the purposes of facilitating the sale of the Certificates at the lowest feasible interest rate, the form of which has been presented to this City Council at the meeting at which this Resolution has been adopted; and WHEREAS, the City Council desires to approve the form of a Continuing Disclosure Agreement (the "Disclosure Agreement ") between the City and Digital Assurance Certificates, L.L.C., the form of which has been presented to this City Council at the meeting at which the Resolution has been adopted; and WHEREAS, the City Council desires to approve the form of an Agency Agreement between the City and the Corporation, the form of which has been presented to this City Council at the meeting at which the Resolution has been adopted. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that: Section 1. Each of the foregoing recitals is true and correct. The City Council hereby finds and determines that the total rental to be paid under the Lease Agreement does not exceed the fair rental value of the leased property identified in Exhibit A to the Lease (collectively, the "Leased Property"). -2- DOCSOC/ 1110296v4/022459 -0014 Section 2. This City Council hereby consents to the preparation, sale and delivery of the Certificates in an aggregate amount of not to exceed $128 million in accordance with the terms and provisions of the Trust Agreement, with the exact principal amount of each series of Certificates to be that determined necessary by the City Manager or the Director of Administrative Services to refund and defease the Prior Certificates, to pay the costs of the Civic Center Project and to pay all associated costs in connection therewith. The proceeds of the Certificates shall be expended to finance the costs of the Project and to refund and defease the Prior Certificates and to provide for a reserve fund, if any, and the costs of the preparation, sale and delivery of the Certificates. Section 3. The Bank of New York Mellon Trust Company, N.A. is hereby appointed as Trustee on behalf of the owners of the Certificates, with the duties and powers of such Trustee as set forth in the Trust Agreement. Section 4. The forms of the Site Lease, the Lease Agreement, the Trust Agreement, the Disclosure Agreement, the Agency Agreement and the Assignment Agreement presented at this meeting are hereby approved. Each of the Mayor, the City Manager, the Director of Administrative Services and the City Clerk is hereby authorized for and in the name of the City to execute the Site Lease, the Lease Agreement, the Disclosure Agreement, the Agency Agreement and the Trust Agreement in substantially the forms hereby approved, with such additions thereto and changes therein as are recommended or approved by Stradling Yocca Carlson & Rauth, a Professional Corporation, as Special Counsel to the City ( "Special Counsel "), or the City Attorney and the officer or officers executing the same, including all changes necessary to reflect the purchase of bond insurance as described in Section 5 below. Approval of such changes shall be conclusively evidenced by the execution and delivery of the foregoing documents by one or more of the authorized officers. The Mayor, the City Manager, the Director of Administrative Services and the City Clerk each is hereby authorized to execute, acknowledge and deliver any and all documents required to consummate the transactions contemplated by the Site Lease, the Lease Agreement, the Disclosure Agreement, the Trust Agreement, the Agency Agreement and the Assignment Agreement. Section 5. The form of the Purchase Agreement presented at this meeting and the sale of the Certificates pursuant thereto are hereby approved, and each of the Mayor, the City Manager and the Director of Administrative Services is hereby authorized to evidence the City's acceptance of the terms and provisions of the Purchase Agreement by executing and delivering the Purchase Agreement in the form presented to the City at this meeting, with such additions thereto and changes therein as are recommended or approved by Special Counsel or the City Attorney and the officers executing the same. Approval of such additions and changes shall be conclusively evidenced by the execution and delivery of the Purchase Agreement; provided, however, that the Purchase Agreement shall be signed only if the aggregate principal amount of the Certificates does not exceed $128 million and the Purchaser's discount (exclusive of original issue discount and any bond insurance premium) with respect to the Certificates does not exceed 0.70% of the aggregate principal amount of the Certificates. The City Manager or the Director of Administrative Services, or their designees, are authorized to reject any terms presented by the Purchaser if determined not to be in the best interest of the City. Section 6. The form of the Certificates as set forth in the Trust Agreement (as the Trust Agreement may be modified pursuant to Section 4 hereof) are hereby approved. -3- DOCSOC/ 1110296v4/022459 -0014 Section 7. The form of the Preliminary Official Statement presented at this meeting is hereby approved, and the Preliminary Official Statement may be distributed to prospective purchasers in the form so approved, together with such additions thereto and changes therein as are determined necessary by the Director of Administrative Services, or his designee, to make such Preliminary Official Statement final as of its date for purposes of Rule 15c2 -12 of the Securities and Exchange Commission. Each of the Mayor and the City Manager is hereby authorized to execute a final Official Statement in the form of the Preliminary Official Statement, together with such changes as are determined necessary by the Director of Administrative Services, or his designee, and the officer executing the same to make such Official Statement complete and accurate as of its date. The Purchaser is further authorized to distribute the final Official Statement for the Certificates to the purchasers thereof upon its execution by an officer of the City as described above. The City Manager, the Director of Administrative Services and their written designees are hereby authorized and directed to take whatever steps are necessary to comply with the requirements of Rule 15c2 -12 applicable to the Certificates following their execution and delivery. Section S. The Mayor, the City Manager, the Director of Administrative Services and the City Clerk are hereby authorized, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary and advisable in order to consummate the sale and delivery of the Certificates and otherwise effectuate the purposes of this Resolution (including but not limited to the execution and delivery of a Calculation Agent Agreement with the Trustee, any consents or agreements to remove encumbrances to title with respect to the Leased Property and to substitute, remove or add property to the Leased Property that is determined by the City Manager to be in the best interests of the City), including the refunding and defeasance of the Prior Certificates, and such actions previously taken by such officers are hereby ratified and confirmed. In the event the Mayor is unavailable or unable to execute and deliver any of the above - referenced documents, any other member of the City Council may validly execute and deliver such document, and, in the event the City Clerk is unavailable or unable to execute and deliver any of the above - referenced documents, any deputy clerk may validly execute and deliver such document in her place. -4- DOCSOC/ 1110296v4/022459 -0014 Section 9. This Resolution shall take effect from and after its date of adoption. ADOPTED, SIGNED AND APPROVED this 9th day of November, 2010. Mayor of the City of Newport Beach ATTEST: (aft F 1 °v City Olerk of the City of Newport Beach APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY: By: L�—d David R. Hunt, City Attorney APPROVED AS TO FORM: SPECIAL COUNSEL: By: Brian Forbath, Stradling Yocca Carlson & Rauth, a Professional Corporation -5- DOCSOC/I 110296v4/022459 -0014 STATE OF CALIFORNIA } COUNTY OF ORANGE CITY OF NEWPORT BEACH } I, Leilani I. Brown, City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing resolution, being Resolution No. 2010 -126 was duly and regularly introduced before and adopted by the City Council of said City at a regular meeting of said Council, duly and regularly held on the 9th day of November, 2010, and that the same was so passed and adopted by the following vote, to wit: Ayes: Selich, Rosansky, Henn, Webb, Gardner, Daigle, Mayor Curry Noes: None Absent: None Abstain: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 10th day of November, 2010. City Clerk Newport Beach, California (Seal)